Tài liệu COMMERCIAL REAL ESTATE INVESTING Chapter 3-4 ppt

31
The factors that affect the value of real estate are generally obvious once they are at
work, causing real estate to rise or fall in value. It’s important to understand exactly
what those factors are and how they can cause the value to move either up or down.
The key to success in real estate is to use this knowledge in determining when and what
to buy, and how to maximize your profit on a sale. Interestingly, the same factor can
CHAPTER 3
What Makes Real Estate
Value Go Up or Down
The goals of this chapter are:
To Demonstrate the Key Factors that Cause Real Estate Values to Go Up or
Down
To Learn How to Take Advantage of These Factors and Avoid Their
Downside Consequences
cause one property to go up in value while causing another similar property in the same
town to go down in value, even if it is just across the street.
Ironically, most of the factors do not just suddenly appear. They are elements that have
been in place for years, such as local zoning or building codes. Those and other factors
may not be noticed or their real impact not unleashed until the owner of a property at-
tempts to take advantage of what he previously thought was the property’s real value.
By understanding the six factors covered in this chapter, you will learn to recognize
how to take advantage of a situation when it arises, as well as how and when to
avoid potential problems that could diminish the value of a property you are about
to purchase.
Community Planning
Nearly every community in the United States, Canada, and most of Europe has
some form of community planning. Within cities this may come in the form of a
planning and zoning department that deals with matters such as “How is this city to
be developed?” The county is further controlled by broader mandates from the state,
COMMERCIAL REAL ESTATE INVESTING
32

Key Words and Concepts to Build Your Insider Knowledge
Community Planning
Departments of Transportation
Fire and Health Codes
Lack of Concurrency
Land Use Changes
Condemnation and Eminent Domain Proceedings
Building Moratoriums
Economic Obsolescence
The Rule of Small
which requires that each county adhere to standards of building and development
to fit the scheme of things that the state legislature has decided. Naturally, there is
also a higher order of things, and the federal government gets its fingers into the
pie through its federal matching funds that local communities vie for—funds
for road development, bridges, tollways, airports, schools, and countless other fed-
eral projects.
Each of these elements of community planning will impose something that may affect
the value of your property so that you win or lose value because of it. Because this
chapter and others in this book show different ways these factors can affect the value of
your property or investments, it is important that you get a good grasp on everything
presented here.
The whole concept of community planning is in constant flux—nothing remains fixed.
One planning team may be prodevelopment and encourage construction and new urban
development, while two elections away a new city council votes to change all zoning
laws to effectively stop development in its tracts. Both situations can occur for good
reasons, or at least good intentions, but they can have disastrous effects on your prop-
erty’s value, and your rights as a property owner.
Departments of Transportation
Each level of community planning may have a Department of Transportation. This is a
powerful factor in controlling development, because development doesn’t flourish un-

less there is good traffic flow in the community. So what goes on in your city will be
greatly affected by the planning that is going on in all the different departments of
transportation, as well as other departments in city, county, and state planning bureaus.
The good news is that, of all the departments in local, state, and federal governments,
transportation is the one that can sow your fortunes right under your nose. Once you
understand how transportation planning functions, you will be able to avoid most of its
potential bite and reap most of its benefits. Why? How?
What Makes Real Estate Value Go Up or Down
33
First of all, understand that decisions and plans of departments of transportation are
slow to evolve. Their future plans take years to draft, and years longer to implement.
New roads and bridges, and revamping, expanding, and even resurfacing old roads are
very expensive undertakings, and when something is expensive it takes a lot of yesses
along the way to get final approval. Public hearings are generally required, and the
public that shows up not to complain but to observe is the public that will ultimately
benefit the most.
World history demonstrates how this works. When one tribe left a foot path marked in the
sand, other surrounding tribes began to use it, and it became a traffic way. Soon someone
built a trading post at the juncture of two such paths. The Romans were successful be-
cause they were great road builders. They knew and understood the value of their av-
enues of transportation and what it would do to a community if their road went through it
instead of through another town 50 miles away. The Romans took advantage of this
knowledge and were able to rule vast parts of the world by virtue of the commerce they
would bring to an area and the tax they would collect on it. Today, the simple announce-
ment of a new turnpike entrance/exit in an otherwise remote area of the county will bring
nearly instant value to the property located at that entrance/exit—or it might bring a sud-
den devaluation of what was once a high-priced, exclusive residential subdivision.
Keep in mind that transportation is not just about cars; it includes pedestrians, trains,
planes, and ships. All of these people- and goods-moving elements of your community
are strongly controlled. There are port authorities, airport authorities, the Army Corps

of Engineers, and many other departments and committees of both government and
quasi-government that are quick to stick their noses into any newly proposed event that
even remotely concerns them.
Fire and Health Codes
The strongest of all the building codes are usually the fire and health codes of a com-
munity. Other building codes may be changed without the requirement of the change
COMMERCIAL REAL ESTATE INVESTING
34
becoming retroactive to a building constructed under older codes. But fire and health
codes are generally absolute, and it is rare for any building to be grandfathered in (al-
lowed to remain as it is) if one of these codes gets changed. Meeting the new fire or
health code can be very expensive. While it might be costly enough in a new building,
tearing existing walls apart to install fire sprinklers is both a nightmare and a hunk of
change out of your pocket. You will learn to pay careful attention to both fire and
health codes.
Lack of Concurrency
This phrase can cause a property owner to shiver on a warm day. Concurrency is a term
that was invented by a land planner. Having concurrency means that your property
meets all the current requirements to enable you to develop the property more or less as
the zoning might allow. If that sentence sounds vague, it is carefully meant to. Most
zoning ordinances governing the use of a specific site or tract of land contain provi-
sions that give the local governing body considerable control over the ultimate end
product. However, one thing is absolute: If you do not meet concurrency, or if you lack
concurrency, then your property may not be developable until you take steps to bring
the property into concurrency.
The problem with this concept is it has grown into a many-armed monster that can eat
developers alive. The simple fact is that to bring a property into concurrency may mean
doing something to remedy the traffic congestion that is presently occurring two blocks
away from the tract of land—like, for example, widen two or three miles of roadway
from a two-lane to a four-lane traffic way. Ouch! An expensive remedy, but not as

costly as many I have seen. Clearly, this is an important factor on which you can profit.
How so? Well, if you have been following the events of a major new development and
discover that the developer is going to have to build a new bridge over a canal to open
up a new traffic route to reduce the flow elsewhere, then that new traffic way might be
where you want to put your new trading post.
What Makes Real Estate Value Go Up or Down
35
Land Use Changes
Land use is a part of the master plan of the community. This overall plan will designate
where development can occur and in what form and density it can be approved. A
change to this plan will suddenly change the overall outlook of the neighborhood and
the anticipated growth of the market for certain businesses of that community. Any
change in any kind of use in your neighborhood, and particularly where you own prop-
erty, can either jeopardize the value of your property or make you a millionaire.
The sequence of land use plans and modifications to them usually starts at the state
level. The state legislators pass an overall master plan for the state, and certain man-
dates are then passed down to the counties, which have some flexibility as to how
they must then implement the plan. The cities within each county then are told,
again with some flexibility, how they are to adopt the overall plan to their area. The
use of the properties within the city or unincorporated area (county-controlled and
not within a city) must fit to the overall land use which has been set by this chain of
decision making.
If the ultimate land use plan allows flexibility, as often is the case, then it may not be
necessary to actually request a change of the plan. However, if the intended or desired
use is not allowed at all, then the owner or buyer must look elsewhere, or try to get a
modification in the plan. An example of this would be where a property is classified as
a retail commercial use. Along comes a buyer who wants to build apartments. If the
land use plan allows apartments in the commercial area, then that is okay; however, if it
does not (which is more often the case), then the buyer may have to go all the way to
the state legislators to effect a change. This is costly and can take a long time—and ul-

timately it may not be approved anyway.
One of the key requirements in speculation in land is to pay very close attention to the
land use plan and the options available for the use of the land you are thinking of buy-
ing. The greater the flexibility of the plan, the more options you might have. Keep in
mind, however, that flexibility is not always a good thing. If the ultimate highest price a
COMMERCIAL REAL ESTATE INVESTING
36
buyer would pay for a tract of land that you purchased 10 years ago turns out to be for
a high-end retail use, and the surrounding land to your tract has become low-end indus-
trial buildings (great flexibility), then you will lose out. The only way to overcome that
potential is either to already know what and who your neighbors are, or to have a large
enough tract to be able to buffer yourself from future development that is not up to
your standards.
Condemnation and Eminent Domain Proceedings
There are two methods by which a governing body can acquire your property without
your permission. The first is by condemnation, and the second is through eminent do-
main. Condemnation is generally the way a city or community redevelopment au-
thority (CRA) will clear out a blighted area to make way for new development.
However, there are certain legal requirements that must be followed, and some states
require that the party that is initiating the condemnation or eminent domain proceed-
ing pay for the cost incurred by the owner if the proceeding is contested. Eminent
domain proceedings are the usual way that departments of transportation obtain
rights-of-way for new or expanded traffic ways. Each proceeding has the same end
result: You sell your property to the agency who wants it, and although you don’t
have to accept the price, you may end up having to take it unless a court rules in your
favor at a higher price.
Building Moratoriums
When there is a rash of development going on, things might be progressing at such a
fast pace that the level of services available to the people who live in the area is being
outstripped. This happens most often when new roadways have opened up vast areas of

vacant land for new housing development. Developers rush in and, before you know it,
there are thousands of new residents living in the area, with thousands more likely to
follow. Traffic can no longer be handled on the new road, and more are needed now.
What Makes Real Estate Value Go Up or Down
37
Schools don’t even exist yet, and forget about things like shopping, fire department and
police services, water and sewer service, and so on.
When this kind of situation starts to get out of hand, there are two things the local gov-
ernment can do. It can make the determination that none of the undeveloped property
meets concurrency, so it cannot be developed until something is done to remedy that
situation; or it can impose a building moratorium. The building moratorium halts the
issuance of a building permit in the area chosen until the city planners have been able
to sort things out and, at the same time, to slow down the pressure on existing services.
Building moratoriums and concurrency issues are difficult to predict, so it is essential
that investors of developmental property take them into consideration in their acquisi-
tion proposals. The way you do this is to include provisions in your offers to purchase
such properties that can protect you as much as possible against the potential delay or
reduction of development you will ultimately be allowed on the tract of land. You will
do this as a buyer and if you are a seller you will anticipate that a buyer will want to
protect himself against such an imposition.
As a buyer interested in building apartments, you have to anticipate that just because
the land is zoned for 50 units per acre does not mean you will be allowed that many, if
any at all. You might cover yourself by putting a timetable in your offer for approval by
the local authorities for your site plan, or even for the issuance of a building permit. If
the seller will agree, you can also tie the price of the property to the number of units
you will be allowed. This would be your best protection as to the maximum price you
can pay, as the price per unit would remain the same if the city allowed you only half
what the zoning allows. Of course, the seller would want to protect the minimum price
by having a floor (the lowest price he would take) in the deal.
Economic Obsolescence

Eventually every real estate property will reach a time when the value of the actual use
skids to a halt. That halt may be temporary or for a rather long time. For example, a
COMMERCIAL REAL ESTATE INVESTING
38
roadway motel gets bypassed by a super highway and just is not economically viable
anymore. It may continue to function, but the income stream drops and the value may go
down for that reason. An office building becomes old and antiquated and tenants move
out to newer and better functioning buildings. A fast-food restaurant that was viable 20
years ago is now too small and the operational costs too high for the volume of business
it can sustain. These are all examples of economic obsolescence and can present oppor-
tunities to you as an investor if you can ascertain a new use for these properties.
The Rule of Small
Income-producing properties are valued by the amount of income they produce. This
sounds logical, of course, but its interesting how the Rule of Small affects this concept.
The Rule of Small is that small movements in the smallest increment of the income
stream will have big impacts on the largest element of the income stream.
Here is an example of how this works: The smallest part of the income stream of a 10-
unit apartment complex will be the monthly rent on each apartment. The largest ele-
ment of the income stream of this same property will be the amount that someone will
pay for this property based on the yield required by that buyer. Let’s tie that to actual
numbers. The monthly rent is $650 per apartment. That rent times 10 apartments gener-
ates a gross monthly collection of $6,500 and an annual gross revenue of $78,000. As-
sume that the expenses for last year totaled $20,000. This would give you a net
operating income (income less expenses except for debt service) of $58,000. Ignore
leverage for a moment. If a buyer needed to make 9 percent cash flow on his invested
capital to purchase the property, he would pay up to $644,444. (I arrived at this by sim-
ply dividing $58,000 by the 9 percent: $58,000 ÷ .09 = $644,444).
Here’s a recap of this 10-apartment example:
Monthly rent per apartment $ 650
Gross rent per month from $ 6,500

10 apartments
What Makes Real Estate Value Go Up or Down
39
Annual revenue $ 78,000
Income less operating expenses $ 58,000 (not including debt service)
An investor will buy at a $644,444 (maximum price the investor
9 percent return would pay)
Let’s assume the investor (perhaps you in another deal) understands the Rule of Small
as it applies to real estate. It is clear that to increase the bottom-line return of this prop-
erty, there are only certain things that can be done without changing its use:
■
Increase rents. The best way to increase the bottom line is to provide for annual in-
creases in rent. Some leases are tied to a cost of living index, or some other outside
benchmark index. In these instances, any increase in that index will cause the rent
to go up by the same percentage. If no such provision exists in the lease, you will
have to wait until the tenant wants to renew or otherwise renegotiate the lease.
■
Decrease expenses. Good management can accomplish a lot to attain this goal.
The key is not just a reduction of expenses, but a reduction of the overall ratio of
expense to the collected rent.
■
Leverage the transaction. By obtaining financing that costs you less than the de-
sired return on your investment, you will obtain positive leverage. The money
you borrow will decrease the amount of capital you have invested, so your ulti-
mate return is leveraged up.
■
Do a combination of the above. A mix of more than one of these elements will
generally be the target any new owner should seek to accomplish.
Let’s look at these four strategies in action. In our 10-unit apartment example, say the
investors can do a little of each of the value-enhancing techniques. The rents are

bumped up to $675 a month, the expenses are cut by $300 a month, and 80 percent of
the price can be OPM from a local savings and loan at an 8 percent total payment of
principal and interest per year. Here is the new economics of the deal:
Gross rent $ 81,000
Less the new expenses $ 16,400 ($20,000 less $3,600 of reduction)
COMMERCIAL REAL ESTATE INVESTING
40
New net operating income (NOI) $ 64,600
Annual cost of debt $ 41,244 (principal and interest of the new
$515,555 mortgage)
New cash flow $ 23,356
Capital invested $128,889
The investors are going to borrow 80 percent of the purchase price needed before the
changes, which was $644,444, so the loan will be $515,555. The cost of this debt is 8
percent of that amount per year, or $41,244. This leaves the investors with a cash flow
at the end of the year of $23,356 (NOI of $64,600 less $41,244 of debt service equals
$23,356 in cash flow). Here is the recap thus far into the deal:
Price $644,444
Loan $515,555
Cash invested $128,889
Cash flow $ 23,356
Return on cash 18 percent (18 percent of the of $128,889 cash invested)
The investors purchased at $644,444 and borrowed $515,555 so they have only in-
vested $128,889 of their own capital. On this they earn $23,356 in cash flow each year.
That is a return equal to a touch over 18 percent. So the Rule of Small has done it
again. The investors went from an anticipated return of 9 percent to 18 percent with
some very modest changes in the economic structure of the deal.
Every rental deal you get into will have the same potential. Sometimes the move to a
better leveraged investment does not occur overnight. However, it may occur the very
next day after you close. How so? Well, what if you negotiated the above purchase, but

the deal was that you would close in six months. In the meantime you would take some
of the cash you were going to put down at the closing and use it to make some im-
provements to the property.
What Makes Real Estate Value Go Up or Down
41
Improvements that can quickly show returns are interior and exterior paint (especially
the front door), new landscaping, a nice new stone walkway, and similar sorts of
things. You do this prior to closing—in fact, you do this prior to getting your mortgage
commitment. Now the property looks different. You might even have rented out a va-
cant space or two at a higher monthly rent than the other tenants are paying, which
shows the lender that higher rents are likely. Now, armed with a new proforma at
higher rents, you borrow even more money than did the investor in the above example.
Every deal will have the potential to allow you to increase rents and decrease the ratio
of your expenses to your gross revenue. Remember, you don’t even have to actually re-
duce expenses, only the proportion of expenses to the total revenue. Small wins every
time. You will see a lot more of this in action throughout this book.
Six Primary Factors That Make
Real Estate Value Go Up or Down
There are six primary factors that can cause the value of any real estate to rise or fall:
1. Supply and demand
2. Local zoning
3. Changes in infrastructure
4. Economic obsolescence
5. Maintenance procedures
6. Motivation to buy or sell
Each is discussed in detail here as to how and why it changes the value of real estate.
You will quickly discover that the same property may be impacted in either direction
by the same factor. A change in infrastructure, like the widening of the road in front of
a strip store, can cause a sudden downturn in value as tenants move out or go out of
business, but a year or two later that new roadway can cause the value to jump to a

COMMERCIAL REAL ESTATE INVESTING
42
higher level than it originally was. The timing and duration of the factor can play an
important role in how you time your acquisition or sale of the subject property. Let’s
look at each of these factors from the following angles:
■
General comments
■
Effect on value (increase or decrease)
■
How to take advantage of the situation
■
Pitfalls to watch out for
Supply and Demand
General Comments: The supply-and-demand effect tends to balance itself out in the
long run. However, there is always a period at each end of the cycle when there is ei-
ther a greater demand than supply or a greater supply than demand. It is important,
when viewing a potential supply-and-demand situation, that you make sure you are
looking at all apples, or all oranges, and not a mix of the two. For example, in a hot
market there can be several things going on at the same time. All expensive homes in
the million-dollar-and-up range can be in great demand with a moderate to low supply,
while townhomes below that price might be overbuilt and the demand for such proper-
ties waning. This would suggest that an ideal time to buy a townhome is just around the
corner and that it is likely a great time to sell a million-dollar house.
Effect on Value: Whenever there is a strong demand for a product, its value will go up.
It is a good idea to examine the situation, however, to ascertain what has created the
current demand that did not exist previously. If expensive high-rise condos are the hot
ticket right now, what caused that? Have drug smugglers found this a great place to do
business? Are people retiring to the area in greater numbers because the air above the
ground floor is more healthful than at first-floor level? Or is it that no new high-rises

have been built for a long time, and that newness of product has always been in de-
mand but there were none available to buy?
What Makes Real Estate Value Go Up or Down
43
Newton found out that what goes up also comes down, but when it comes to real estate,
that fact may not have any real bearing on your future profit or loss. You have already
seen that you can profit nicely even when you sell for less than you paid for a property,
but it helps to make even more than you paid. Property values are relative, however,
and the true test of value is what you can buy once you sell. Too many people overlook
that factor and put a big profit in their pocket, only to find that there is nothing in the
marketplace that they can purchase to replace what they just sold. Therefore I always
caution investors when they get excited about a profit or despondent over a potential
loss of value.
The supply-and-demand cycle is just that—a cycle. If the investment property is still
throwing off a return you can live with, then hold on to a declining value if there is a
good reason for the downturn, and if the light at the end of the tunnel—a change in the
cycle—is just around the corner.
How to Take Advantage of the Situation: As I just mentioned, it might be a good idea
to ride the down-cycle through its course if you find that you are well into it. If, how-
ever, you are just entering the cycle, you may want to consider making a move before
the situation worsens, if you can. If you are in a really hot market, it is usually easy to
see when the end is coming. All you have to do is to check out how much inventory is
either available or being planned. If the product is flex-space (warehouse/office build-
ings), a quick review of industrial vacant or redevelopment land available can give you
a good clue as to how long the rise in redevelopment will last. If there is a shortage of
available land, the new development will come to a sudden halt and prices in the exist-
ing product will go even higher. This will occur because the demand will continue, un-
til the high prices cause developers to open up other areas that are not too distant from
the present area. Then local prices may stabilize or even drop as cheaper product comes
available elsewhere. This concept can be applied to any kind of real estate use.

In almost any situation, there are opportunities to be had. A strong demand will eventu-
ally cause one of two events to happen. The first is that developers will run out of new
sites to develop and the unspent demand will open up other areas. If you know that the
COMMERCIAL REAL ESTATE INVESTING
44
current hot area will run out of development sites, then be the first (or one of the first,
anyway) to find a new area that will offer opportunity for new product at a better buy.
Keep in mind this new product will need to overcome the distance from the hot area by
offering a similar or better product at a lower price.
The other possibility is that the demand will continue, and more and more supply will
be developed in anticipation of the demand, until there is an overabundance of supply.
Bam!—the hot market suddenly slows and things even out. You will have anticipated
this and already be looking for an in-fill location and a new kind of product that will
cater to the people who are occupying all these flex-space warehouse/offices. (In-fill lo-
cations are areas in the heart of existing communities or development where old build-
ings are torn down to make way for new product.)
Pitfalls to Watch Out For: The interplay of supply and demand is a factor that rarely
exists by itself. There are almost always two or more factors occurring at the same
time. One of the most critical outside influences to fuel the supply-and-demand cycle is
the sudden loss or considerable reduction of the supply side of the equation. I say “sud-
den” because it may appear that way to the general public while not actually being sud-
den at all. For example, the city rezones a major area of land, currently zoned for
industrial use that allows flex-space development and changes it into low-density office
park zoning. This will not spur new office park development unless that was already a
hot issue, but it sure will affect the flex-space market that is soon to be hot by decreas-
ing the supply of that product. Be wary of well-intending government officials.
Local Zoning
General Comments: As I stress use over any other single determinant of the ultimate
value of real estate, zoning becomes the critical factor that all investors must take into
consideration. Zoning is an ever-changing element that goes through evolution within a

city. When the city fathers are development-prone and embrace every new project with
open arms, the codes and their interpretation may be relaxed; whereas when one or two
What Makes Real Estate Value Go Up or Down
45
of the city commissioners are voted out and new ones replace them, the mood changes
and antidevelopment is the rule of the day. Because zoning is so important, be sure to
pay close attention to the “pitfalls” section of this category.
Effect on Value: Zoning and the building codes that regulate what actually is buildable
are far more critical to commercial real estate than to single family homes. Why? Be-
cause the codes are tougher and more comprehensive. A home owner can, in most areas
of the country, install a well system for drinking water without being required to test
the water quality. But if the property is a hotel or restaurant or any business operation,
the well water would have to be tested, and if it were found unsuitable for consump-
tion, another water source (bottled water or a water purification system designed for
commercial use, for example) would need to be provided.
Zoning is in constant flux—that is, it is going through evolution and change. This
means that what you were able to do with your property 15 years ago when you pur-
chased it may not be the same today when you want to tear down your old motel and
put up a brand new Hampton Inn. For this and many other reasons (specific to each
unique combination of area, current zoning, and intended use), consider zoning to be a
potential pitfall you must overcome. New interpretations of the code are made by zon-
ing board members as well as city commissioners, none of whom may be experts in the
field, and who may have no experience in investing, developing, or financing a project
like the one they are nonetheless about to either turn down or approve.
Yet zoning is also a grand opportunity that awaits the investor who takes the time to
study how it can be used. Those potentials for profit will come to anyone who can learn
how to look beyond the fact that a neighborhood is made up of small frame homes that
were built 70 years ago and realize that the underlying zoning allows multifamily
homes with a mix of commercial areas in between. These are the places where dreams
are formed, goals realized, and fortunes are made.

How to Take Advantage of the Situation: When you truly understand the zoning or-
dinances and building codes of your comfort zone, you will discover that it is the
COMMERCIAL REAL ESTATE INVESTING
46
guidebook showing you where to look for your commercial investments. The example
of old single family homes sitting on land that is zoned for high-density, multifamily
properties is real. Many cities have these areas right in the more valuable parts of
town—the center of town. Individual lots and building sites can be assembled, allow-
ing a developer or investor to end up with entire blocks of high-density real estate. The
creation of a large building site where only small lots existed before is not the result of
rocket science. Mind you, the zoning was there all the time. The homes sat there for 40
years or more, but no one really paid attention to the situation—until you did.
Let this be a good example of why the steps to wealth are almost never seen by most
people. The more you know about what is going on in your backyard, the greater the
opportunity you will have to recognize where to dig for your gold.
Pitfalls to Watch Out For: There are many factors, however, that create difficulty
when analyzing zoning. First of all, the terminology or classification of zoning differs
greatly between communities. Cities within the same county may have similar zoning
classifications but the interpretations of what they allow can differ greatly. An R-4 clas-
sification might mean four units per acre in one city, whereas RMM4 might be the
counterpart zoning in the adjoining city. Some zoning classifications, such as a B-3
zoning, might be the most flexible commercial and business zoning in one city, but in
an adjoining city it might be one of the least flexible. The key is to know the applicable
zoning codes and what is allowed and not allowed.
Yet even when you think you’ve figured out what you can do, you may notice a small
asterisk by the words “minimum setback” and 10 pages later discover that setback is
tied to height, and that the higher you go, the greater the setback. These are what I call
“gottcha” terms, and they can be hidden within the code—not entirely because the
planners want to hide them, but because they get added years after the original code
was drafted. When it comes to zoning (and anything else that is governed by the city or

county commissioners or one or more of their departments), you must keep abreast of
not only the codes and ordinances, but how they are applied to situations that parallel
your own circumstance.
What Makes Real Estate Value Go Up or Down
47